An Analysis Of How China’s Local Government Debt Affects Local Economic Growth From Both Theoretical And Empirical Perspectives

The problem of local government debt has always been widely concerned by the academic community,especially after the 2008 financial crisis,countries have introduced a series of policies and measures to deal with the crisis and stimulate the economy.Local governments in our country have stimulated economic growth to a certain extent through borrowing,but blindly expanding debt,with the continuous accumulation of local government debt,not only cannot promote economic development,but excessive local government debt will affect the stable growth of the economy.even more serious consequences.The purpose of this article is to conduct an in-depth analysis of local government debt and economic growth,and to explore the impact mechanism between the two.Based on the actual situation of China’s local economy,this paper uses provincial panel data to discuss the long-term and short-term relationship between local government debt and economic growth in different regions of my country.So far,the academic literature on local government debt and economic growth is inconclusive,both theoretically and empirically.This paper makes full use of the previous research results.In terms of theoretical models,by sorting out the relevant research literature of the predecessors,this paper comprehensively understands the development of the local government debt theory,and discusses the long-term and short-term mechanism of local government debt affecting local economic growth.In terms of data,in view of the situation that most scholars choose estimated data or proxy variables to measure local government debt,this paper overcomes this problem and adopts the official data of local government debt to make the data more accurate and true,and further conducts existing research.In-depth discussion and expansion.In terms of empirical analysis,due to the special situation in my country,there are differences in the economic development of various regions.This paper uses provincial panel data to establish an empirical model to test the relationship between local government debt and economic growth in different regions of our country.Finally,I hope to put forward some feasible suggestions and opinions for preventing local debt risks through the empirical results of this paper and combining with the current actual situation in our country.